Why CIOs Are Crucial In Designing Business Strategy

Is the confidence in the use of information technology to support business growth and goals on the decline? A recent survey report published by McKinsey shows that few CIOs today are actively involved in shaping the business strategy of the company. While the surveyed executives realize the growing importance for data and analytics in shaping the strategic agenda, they seem to disagree with what the overall goals of the IT function should be. Here are some interesting snippets from the survey report.

IT Performance In Functional Processes : Most IT executives believe that their function has been effective to a large extent in managing the IT infrastructure of the company, along with monitoring the performance and driving innovation in business operations. However, close to one fifth of the surveyed executives feel that their function has not been effective at introducing new technologies faster and more effectively that competition.

Differences In IT Top Priorities : Executives from across the board are pretty divided in their opinion on what the top priorities for the IT function should be. While close to 54% of non-IT executives believe it is the job of the IT department to provide them with the information needed for planning and decision making, just over a third of IT executives agree to this. Instead, over 40% of IT heads consider the reduction in IT costs as their top priority.

The Need For IT Involvement In Strategy : There is a significant difference of perception among IT and non-IT executives about the processes where information technology organization are effective. While IT executives consider themselves to be adept at managing IT infrastructure, managing the culture, health and performance of the IT organization along with enabling technology in business processes, the non-IT executives believe IT organizations are more effective at working with business leaders to improve existing systems, developing new technology-supported business initiatives and proactively engaging with the business functions for new ideas and enhancements.

Overall, there is a glaring difference of opinion among IT and non-IT executives about the exact priorities of the IT function. While IT leaders appear to be more inward looking on what their priorities are, the non-IT functions expect the technology organization be outward looking in solving problems and enhancing performance.

According to Jonathan Saragossi, the CEO of IM Creator, it is important to view the roles and responsibilities of the information technology team from both these perspectives. IT is a critical piece of infrastructure for organizations today and it is important to look at it from a business manager's perspective of how it can foster innovation and improve efficiency. At the same time, IT is also a major cost center and the product and processes need to be constantly optimized to ensure an agile and efficient framework. Ignoring one perspective for the other could be disastrous for businesses

Similar recommendations have also been made by McKinsey with respect to charting the future course for the CIOs. The report suggests awarding technology leaders at companies with a greater stake in shaping business strategy. This, they suggest, will help in shifting the mindset of the IT department from that of a supplier to that of a business owner. Another major recommendation is to help CIOs improve their understanding of the business – this will help them look outward and identify opportunities and challenges in businesses processes where IT could help.

Technology has become an indispensable part of business operations today. It is extremely critical for business leaders to recognize this and roping in IT as a key stakeholder for all business strategy decisions.

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Bill has been a member of the technology and publishing industries for more than 25 years and brings extensive expertise to the roles of CEO, CIO, and Executive Editor. Most recently, Bill was COO and Co-Founder of CIOZone.com and the parent company PSN Inc. Previously, Bill held the position of CTO of both Wiseads New Media and About.com.